When aggregate expenditures fall below the full-employment level of output,which of the following types of unemployment is most likely to increase?
A)Cyclical.
B)Seasonal.
C)Frictional.
D)Structural.

Question

Quizplus · Accepted Answer

Cyclical unemployment is the type of unemployment that occurs due to a decline in aggregate demand, resulting in a decrease in production and, consequently, employment. When aggregate expenditures fall below the full-employment level of output, firms may face a decrease in demand for their products, leading to a decline in production and employment. Hence, cyclical unemployment is most likely to increase in this scenario.

When Aggregate Expenditures Fall Below the Full-Employment Level of Output,which